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JOHN KING, HOST: Thanks Wolf and good evening everyone. Tonight Israel reacts icily to President Obama's big speech on the Middle East using remarkably blunt language to reject the White House framework for new Israeli-Palestinian peace talks. The crackling tensions overshadowed what the president had hoped would be a lofty inspirational speech about U.S. goals in the fast-changing Middle East.

(BEGIN VIDEO CLIP)

BARACK OBAMA (D-IL), PRESIDENT OF THE UNITED STATES: The status quo is not sustainable. Society is held together by fear and repression may offer the illusion of stability for a time. But they are built upon fault lines that will eventually tear asunder.

(END VIDEO CLIP)

KING: Tonight we'll tap CNN's unrivaled global reach to analyze the president's speech and its impact or lack of an impact on key hot spots in the Middle East and North Africa.

There's also other big news tonight, the French financier Dominique Strauss-Kahn is free on bail and also out of a job and under indictment now on charges he tried to rape a New York hotel maid.

Up first though, the simmering feud between President Obama and the Israeli Prime Minister Benjamin Netanyahu. The relationship, well, frosty to begin with and the president struck a new nerve it seems with this assessment near the end of his big Middle East speech.

(BEGIN VIDEO CLIP)

OBAMA: We believe the borders of Israel and Palestinian should be based on the 1967 lines with mutually agreed swaps (ph) so that secure and recognized borders are established for both states.

(END VIDEO CLIP)

KING: Mr. Netanyahu quickly called that a bad idea. In and of itself perhaps not a surprise, but his blunt language was. Quote, "The viability of a Palestinian state cannot come at the expense of the viability of the one and only Jewish state", a statement from the prime minister's office read and it went on to say, "that is why Prime Minister Netanyahu expects to hear a reaffirmation of from President Obama of U.S. commitments made to Israel in 2004. Among other things, those commitments related to Israel not having to withdraw to the 1967 lines."

It is a remarkable public airing of a disagreement among friends and it immediately rippled through our domestic politics as well. Let's dig deeper with two veterans of U.S.-Israeli relations, my colleagues Wolf Blitzer and Gloria Borger.

Wolf, I don't remember a time in covering this issue, there are tensions from time to time between American presidents and Israeli prime ministers. But for the prime minister to say essentially, I expect you, Mr. President to take it back.

WOLF BLITZER, HOST, "THE SITUATION ROOM": Yes, it's tough talk and it's going to be icy tomorrow when they meet over at the White House. And then they have a joint photo opportunity. I'm sure they are going to try to patch things over on the surface, although under the surface, the relationship as you know, certainly as Gloria knows over the past two years has not been good ever since almost day one when the president urged the Israelis to free settlement activity in the West Bank.

KING: And on the one hand it's not a surprise what the president said. Everybody knows that's the general framework, you go back to that map and I'm going to show you the map in a minute. And then you tinker with it. But that he said it publicly was new for a United States president, essentially to go there.

(CROSSTALK)

KING: But that the Israelis pushed back so quickly and publicly on the eve of this meeting was astounding.

GLORIA BORGER, CNN SENIOR POLITICAL ANALYST: Well because I think they believed that what the president said means an equal exchange of territories in a final deal. When you talk about mutually agreed swaps, they're saying OK, we give x, they have to give x. And so they are saying you know this can't be an equal game here and so they are looking at this as not just any kind of a restatement of what Bill Clinton was talking about. But they are looking at a violation of what they say George W. Bush promised them in a letter explicitly in 2004.

KING: That letter was to the former Prime Minister Ariel Sharon.

BORGER: Right.

KING: The Obama administration has said we're not bound exactly any way. (INAUDIBLE) continuity and policy, but they say they're not bound exactly. But Wolf, the White House seemed a bit taken aback because they thought this was an even handed approach that yes they wanted to make clear they thought Mr. Netanyahu needed to move, needed to budge. They think he's been too stubborn, but they also said for example, the Palestinians need to figure out, you know now that Fatah and Hamas have an alliance again that Mr. Abbas has to convince Hamas to say Israel has a right to exist. So they were a bit taken aback it seemed at the White House. BLITZER: Well it was a very even handed statement. The president was very tough on the Palestinians and he said, you know unless Hamas accepts Israel's right to exist, you can't blame the Israelis for refusing to negotiate with them. So he was pretty tough on that and he was forceful in reasserting the U.S. commitment to Israel. There's no doubt about that as well. But you know this -- the words are so sensitive.

(CROSSTALK)

BLITZER: And even though all of us who covered Bill Clinton's final months in office when he tried to negotiate a deal with then prime minister Ehud Barak they wanted to have that kind of swap as part of a pre-'67 line, but even Secretary of State Condoleezza Rice in her final months when she was negotiating with the Israeli Prime Minister Ehud Olmert and Mahmoud Abbas, they had that swap but to formally state it, it's an irritant for the Israelis. I suspect the (INAUDIBLE) will get over it.

BORGER: Well he's a tough negotiator, right. I was talking to a senior White House adviser after the speech. He was kind of frustrated by this reaction that Netanyahu had, also the reaction of Republican presidential candidates. I mean Mitt Romney said that the president had thrown Israel under the bus. And this adviser said to me that's absolutely ridiculous. The president specifically stated that he would do nothing to jeopardize Israel's security.

KING: He did but they also understand number one, the context. We're heading into a re-election cycle.

BORGER: Right.

KING: The president wants the Jewish vote. Both parties are trying to raise money off the Jewish community. Florida a very important state with the Jewish vote -- could be if it's competitive swing vote. Let's go through some of that.

I want to go to the map and since you brought up the politics, Lindsay Graham, conservative senator from South Carolina, very disappointed in the president singling out one issue. He didn't single out one issue, but that's what Lindsey Graham decides to say. Eric Cantor statement by keeping the burden and thus the spotlight on Israel, the president is giving the Palestinian authority more incentive. Well the president kept the spotlight on both, but again in politics you pick what you want to see. You mentioned Governor Romney says under the bus. Governor Pawlenty, dangerous demand, another Republican presidential candidate.

BORGER: Yes.

KING: Jon Huntsman, the president's former ambassador to China, more politely saying tonight in New Hampshire, you should have asked Israel first what they think, so Wolf, it is inevitable that this will become part of our politics and perhaps Prime Minister Netanyahu who has so much experience here in the United States knows that. BLITZER: Yes, he's going to be delivering a major speech too in the next few days. Then he's invited to address a joint session of Congress on Monday. My whole suspicion of why did the president of the United States decide now to deliver this speech, what was the timing of it, I think it was designed to sort of preempt Netanyahu because he was coming to Congress on Monday.

BORGER: You know here's my -- here's my other question and I hesitate to ask a question to which I don't know the answer. I'm trying to find out -- is when did the prime minister learn about this? You know very often and you guys have both covered the White House, when you do a speech that is this delicate, you show it to the Israelis, say in advance. And we know the president was very late in coming out there today. We don't know why, but you know my question is, when did Netanyahu see this speech? Did he react in advance to the White House and say, whoa, you know I don't want you to do it and did the White House do it any way?

(CROSSTALK)

BLITZER: My own sense is that the president really believes this. He studied this issue. He knows the Israeli-Palestinian conflict. And there were some advisers, some of the more political advisers who didn't want him to be specific on these sensitive issues but some others including I think the Secretary of State Hillary Clinton wanted him to be specific. I don't know where George Mitchell who resigned abruptly the other day --

KING: He wanted even a more detailed plan --

BLITZER: Yes.

BORGER: Right.

KING: He wanted an Obama plan like the Clinton plan --

(CROSSTALK)

BLITZER: But this was the president's decision in the end and he decided this was the right thing to do for the United States, the right thing to do for the Israelis and the Palestinians.

(CROSSTALK)

BORGER: But they don't think it's a departure.

KING: They don't think it's a departure, but they certainly now have a little bit of a kerfuffle, I'll call it. I just want to show people what we have. This is the pre-1967 map the president was talking about. If you look at where we are today, you see here you have the Palestinian territories here in the West Bank. You have the Israeli settlements up here in the Golan Heights. There are some Israeli settlements out in West Bank; the Gaza Strip is over here.

One of the plans all along has been if you have a continuous Palestinian state, would Israel give up a strip of land say somewhere across here to connect the West Bank to the Gaza Strip? And if so, what will they get back then from the Palestinians. That has been the negotiations going back to the Clinton administration.

Just to have it said so publicly today by the president appears to have pierced a nerve in the Israeli government. And a bit earlier I spoke with the president's deputy national security adviser, Denis McDonough, and I began by asking him about this, this extraordinary Israeli statement that Prime Minister Netanyahu expects President Obama to back away from what the president said just today in his speech.

(BEGIN VIDEOTAPE)

DENIS MCDONOUGH, DEPUTY NATIONAL SECURITY ADVISER: Well John, the president looks very much forward to the meeting tomorrow with Prime Minister Netanyahu. It will be their seventh meeting and an opportunity to discuss this matter, but also their ongoing -- our ongoing cooperation with the Israelis across a range of issues, to include our effort, historic in fact to fight back against (INAUDIBLE) efforts against Israel and international forum and also working together against our shared concern about Iran's nuclear program.

(CROSSTALK)

KING: That's a very diplomatic statement. Forgive me for interrupting. I understand the difficulty here. This is one of the most sensitive relationships for the president of the United States. But within moments of the president's speech, for the prime minister of Israel to say, no, no the central thing you outlined when it comes to the Israeli-Palestinian conflict is unacceptable it speaks volumes, doesn't it?

MCDONOUGH: Well I didn't hear you read the word unacceptable or hear you read the word unacceptable, but we will continue obviously to work very closely with our Israeli partners as it relates to this issue. This is not an issue that's totally unprecedented, of course, John. You've heard presidents in the past work on this as it relates to borders and efforts in the past.

You also obviously heard former prime ministers and governments in Israel raise similar types of proposals. But here's the commitment. You highlighted one -- one principle, which is the 67 borders with mutually agreed swaps. What you didn't highlight is the commitments the president made in the speech to Israel's security. This is an effort that frankly we've been working very aggressively with our Israeli partners including military to military, as well as at the political level.

The president has directed us to do that. The American taxpayers have made unprecedented investments in Israeli security including with very successful programs like the Iron Dome Program, which is stopping rockets launched from the Gaza Strip. So we'll continue to make those resource allocations, those investments.

We'll continue our very important work as it relates to threat mitigation and threat reduction. And then at the end of the day, we're going to have disagreements with our good friends. That happens with our allies. But this is the kind of relationship that can withstand that. And that's exactly the kind of issues the president will discuss with the Prime Minister tomorrow.

KING: It's a foreign policy speech, global challenges the president addressing, but you understand the timing, Denis McDonough. We're heading into a political cycle here in the United States and a number of conservatives have already criticized the president for what he said about Israel. Here's one just from Mitt Romney, the former Massachusetts governor, a Republican candidate for the Republican presidential nomination. He said the president violated the first rule of American foreign policy and had thrown Israel under the bus.

MCDONOUGH: Well, John, I think the first rule of American foreign policy is to protect the United States and our interests. That's exactly what this president has done and will continue to do, to include in our efforts to make unprecedented investments in Israel's security, to work jointly against our concerns related to Iran's illicit nuclear program. We'll continue to do just that.

But we're not going to get into the politics of this, John. We'll leave that to somebody else. Our job isn't to worry about the politics or the polls or the season that you just referenced. Our job is to worry day in and day out about securing the American people, securing the United States, and working very closely to secure our critical allies like the Israelis. That's something that should be frankly above politics.

KING: Let's talk about some of the other challenges the president addressed in the speech. Earlier it took a bit of time but the president did come out and say Mubarak needed to go in Egypt. He did come out pretty quickly and say Gadhafi must go in Libya. But listen here to the president addressing the situation right now in the middle of a violent crackdown in Syria.

(BEGIN VIDEO CLIP)

OBAMA: The Syrian people have shown their courage in demanding a transition to democracy. And President Assad now has a choice. He can leave that transition or get out of the way.

(END VIDEO CLIP)

KING: Why does President Assad get a longer leash, if you will, than Presidents Mubarak or Gadhafi?

MCDONOUGH: Oh, I don't think he gets a longer leash. I think what you've seen is the United States coordinating very closely with our European friends, with our allies, with the Turks to make very clear what we expect of leadership in Damascus. Yesterday we rolled out a series of sanctions that targeted directly President Assad and some of his closest advisers for the steps that they've taken.

As it relates to his future in that position he has now worked himself into a position of much deeper isolation by killing his own people, by refusing to allow human rights investigators into Syria to ascertain exactly what's happened there and until he works himself back out of that isolation, he's not going to be able to continue to effectively lead his country. That's a fact, John, and that ultimately is the most concerning fact for the Syrian people.

KING: Ahead tonight freedom for the prominent French political figure accused of trying to rape his hotel maid, but freedom at a price. We'll break down the new charges against Dominique Strauss- Kahn.

And how did the president's speech play in Egypt, Syria, and elsewhere in the Arab world? We'll take you there next.

(COMMERCIAL BREAK)

KING: If President Obama had but one goal today, it was to align himself with the pro democracy activists springing up across the Middle East and North Africa.

(BEGIN VIDEO CLIP)

OBAMA: Our message is simple. If you take the risks that reform entails, you will have the full support of the United States.

(END VIDEO CLIP)

KING: But as he promised to help reformers in Tunisia and Egypt, the president disappointed activists in Syria by stopping short of calling for regime change there and some were quick to cry hypocrisy after a speech in which the president candidly acknowledged U.S. strategic interest would sometimes trump support for democracy and never once mentioned Saudi Arabia.

(BEGIN VIDEO CLIP)

OBAMA: Not every country will follow our particular form of representative democracy. And there will be times when our short term interests don't align perfectly with our long-term vision for the region.

(END VIDEO CLIP)

KING: Let's get some perspective now from three of our correspondents who have years of combined experience covering this important and volatile region. Nic Robertson tonight is in Djerba, Tunisia. Ben Wedeman is in Benghazi, Libya and Arwa Damon in Beirut.

Ben, I want to start with you. I was following some of your tweets during the president's speech and here's a big question. As the president says I'll be on the side of the reformers, the United States will help you. Is he viewed in the region as relevant?

BEN WEDEMAN, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well, you know I have to say that this revolution is an ongoing thing and very much there is a lot of skepticism about the American role in Egypt, for instance. There's a lot of resentment over the fact that for decades the United States was a very close partner of Hosni Mubarak providing him with billions of dollars in economic and military aid.

And it was only at the very last minute that the United States dropped him like a hot potato and threw in its support for the revolution. And so you have decades of passions of resentment that have finally been freed with the fall of these regimes. And therefore, a lot of that passion, resentment and anger is being focused at the United States and no fault of his own necessarily because he's only been in office for just over two years, but at Barack Obama himself -- John.

KING: And Nic, it was striking listening to the president. He noted that the Arab spring began where you are in Tunisia. He talked about how the United States wanted to help. He was candid in acknowledging that sometimes strategic interests like say relationship with Bahrain, might get in the way of the long-term goal. But I was struck, Nic, he did not mention one country where you have visited several time. It is such an important player in the region, not one mention of Saudi Arabia. Did that strike you?

NIC ROBERTSON, CNN SR. INTERNATIONAL CORRESPONDENT: It did. Relations with Saudi Arabia are perhaps about as fort (ph) as they have been. Saudi Arabia wanted to see the United States stick by its former ally Hosni Mubarak for longer, give him sort of a softer landing, if you will. And I think that was reflected there, that President Obama is not mentioning Saudi Arabia because they are still a huge player in the region.

And he doesn't really have anything to say either way because in many ways they represent everything that President Obama says he wants to change, democratic change, essentially a better trickle down economy, countries led in a better economic fashion that benefit all of the people. Of course, Saudi Arabia is hugely rich, but it's not a democratic country by any stretch of the imagination, so the (INAUDIBLE) really of the future for the region that President Obama is talking about and perhaps by the fact that he didn't mention them by name, perhaps may help and try to sort of build and mend fences.

KING: And Arwa, the president said he would be on the side of the reformers and yet though he called for Mubarak ultimately to step down, has called for Gadhafi in Libya to step down. He's stopped short when it comes to Syria, the country you're watching most closely right now, essentially holding out perhaps some last hope that President Assad would get the message and lead a transition to reform. From everything you have seen on the ground, wishful thinking, is it not?

ARWA DAMON, CNN INTERNATIONAL CORRESPONDENT: The Syrians do appear to be fairly confident in the sense that they do seem to believe that they still have the upper hand in all of this. They realize the challenge that Syria poses because of its strategic position in the region because of its very close alliance with Iran, because of the fact that it shares a border with Israel, because it does have the ability should it choose to do so to ferment unrest here in Lebanon for example. And this to a certain degree has frustrated and angered some Syrian activists who did want to hear the president come out and simply say that President Bashar Assad has lost his legitimacy to lead.

That being said, John, there is the realization amongst Syrians that the U.S. is not going to bring about the type of regime change that they want nor do they want the U.S. to do that. This is they say a Syrian revolution. Regime change will come about at the hands of the Syrians. But they do still want to see stronger support from the U.S. and much stricter and harsher rhetoric being leveled against Bashar Assad -- John.

KING: Arwa Damon, Nic Robertson and Ben Wedeman, thanks.

In addition to our experienced reporters we also value the perspective of the young activists who are stirring the reform movements. Last night one of them, 24-year-old Egyptian blogger and activist Gigi Ibrahim told us this.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: At this point it's completely irrelevant to what this country is going through right now.

(END VIDEO CLIP)

KING: But she did watch the president's speech and we checked back to see if President Obama changed her mind.

(BEGIN VIDEOTAPE)

GIGI IBRAHIM, EGYPTIAN BLOGGER & ACTIVIST: It was insignificant and it wasn't anything new that we didn't expect. I mean, it has been the same speech with every president pretty much of the United States. Nothing that was different really that we didn't know already.

KING: And so let me boil it down this way, the president's goal was to reach out to people like you and say, I'm on your side, I want to help you. You either don't believe him or you don't think it matters or both?

IBRAHIM: How President Obama can help us or the American administration is to really stay out of it all. We are the only ones capable of building our own democracy, our own economy, our own political life with no aid from anybody. And if we can't do it on our own, then we can't do it. But any intervention, it's like -- because this change happened from within and because it was truly aside from any foreign force that now the U.S. is trying to get you know, in it somehow or to be part of this change when they have no business to do so or any other country.

And I think this is kind of the reaction that I have been hearing on Egyptian TV or reading on Twitter or just speaking with my friends, is that, you know, it's nothing new that the U.S. aid will never be genuine. It will be in favor of something else. And this takes us back to the old cycle that we want to end.

(END VIDEOTAPE)

KING: CNN's Fareed Zakaria is also in Cairo tonight. Let's start big picture, then we'll hone in on specifics. What is in your view and from your conversations there in Egypt the most important thing the president did say in his speech today?

FAREED ZAKARIA, CNN'S FAREED ZAKARIA GPS: Honestly, John, it's been a hard sell in Egypt. The Egyptians particularly those who organized the revolution, whom I spend a lot of time with, they feel that the United States and the Obama administration came to the party late. They offered very little. So they were a hard sell. I don't think that there was anything that President Obama said that really swayed them.

I would argue that he did try to present at the broadest level the idea that the United States is squarely behind this democratic wave, that while there are going to be variations from country to country, in general, the United States supports what is going on in the Arab world. And he tried to put the United States behind the aspirations of the Arab people. I think it will take more than simply saying it to convince the Arab people of that. And that's what I've been discovering talking to people here.

KING: And to that point, how hard is it, at a time when we know U.S. credibility is low to begin with, for the president to sell himself as a friend of reform, when even he admits there are inconsistencies and critics would say hypocrisies in his approach. That yes he would say that Mubarak must go, that Gadhafi must go, but he won't say Assad must go. Yes, he will talk against the violence in Syria and against the violence in Libya, but he is not as forceful when it comes to Bahrain and he was silent when it comes to Saudi Arabia.

ZAKARIA: I think this is the hardest nut for him to crack because the people here, particularly the protesters, the activists, you know, like students and young people everywhere, they want perfect consistency. They want an end to what they call hypocrisy and some of that they mean with regard to the Israel versus the Arab countries, but a lot of it they mean relating to the issues you just laid out. But here's the problem.

The United States -- Obama is not simply the professor in chief of the United States. He's the president. He has to worry about American interests and the reality is that in foreign policy you can't treat all of these countries the same. There are going to be differences. For example the big one you mentioned is Saudi Arabia, but the United States cannot take -- you know cannot educate (ph) for reform in Saudi Arabia because instability in Saudi Arabia would be devastating.

Instability in Saudi Arabia would mean $250-a-barrel oil. It could well mean that the western world, indeed the whole world would be plunged into another global recession. He has to balance that against the democratic aspirations of people in the Arab world. No president is ever going to be able to be perfectly consistent.

And so he's going to have to live with the fact that for many people in the Arab world, particularly some of the activists he will be seen as inconsistent. He will be seen as a hypocrite. I would argue you know when you're a politician, when you're a president, when you're looking at the national security it comes with the territory.

KING: Comes with the territory. Near the end of the speech the president turned to the generations old problem in the region, the Israeli-Palestinian conflict and the White House viewed this as an even handed speech. He said on the one hand he wants Israel to think about going back to the 1967 borders. He said the Palestinians, especially the Hamas faction within the Palestinians need to come to the table ready to recognize Israel.

And yet, Fareed, the Israeli prime minister, Benjamin Netanyahu immediately said no and said he expects President Obama -- he used the term expects the United States president to keep a commitment George W. Bush made that Israel would not be held to the old borders. What do you make of that?

ZAKARIA: I was surprised that President Netanyahu said that because what President Obama said was very clear, which was that it was on the basis of the 1967 borders plus land swaps that both parties agreed to, which was after all the Clinton plan, which everyone understands is going to be the ultimate basis. In other words you don't end up with this 1967 borders, you end up with -- you start there and then you make some horse trades.

The Palestinians for example need a corridor of land that would connect Gaza with the West Bank, so obviously they would have to give up a certain amount of land. I think it speaks to the fact that Prime Minister Netanyahu really does not want to move forward and is searching for any excuse. What President Obama said I thought was extremely even handed. He condemned Hamas.

He said Israelis are correct not to negotiate with Hamas, called on them to renounce terrorism, called the (INAUDIBLE) pact between Hamas and the Palestinian Authority troubling. As far as I could tell, he said everything he could say to make clear that he affirmed Israel's security, offered it assurances. And for Prime Minister Netanyahu to take a speech like that and to view it as one-sided really tells you that at some point you know he was waiting to say no.

KING: Fareed Zakaria for us in Cairo tonight. Thanks Fareed.

Still ahead, some crackling political news, Donald Trump breaks another promise. And what newcomer to the Republican presidential field will love this.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: There's no question that he's a conservative. He weighed to the right of Barack Obama, for goodness sake.

(END VIDEO CLIP)

KING: And up next we take you inside the courtroom as the powerful French financier accused of sexual assault makes his case for freedom.

(COMMERCIAL BREAK)

KING: Dramatic developments in a case being watched around the world. The New York grand jury indicted the former International Monetary Fund chief, Dominique Strauss-Kahn, on seven criminal charges, including attempted rape.

Prosecutors say they've got a solid case.

(BEGIN VIDEO CLIP)

JOHN MCCONNELL, ASSISTANT DISTRICT ATTORNEY: While the investigation still is in its early stages, the proof against him is substantial. It is continuing to grow every day as the investigation continues.

(END VIDEO CLIP)

KING: CNN national correspondent Susan Candiotti was in the courtroom and joins us now live with the details.

So, Susan, granted bail, does that Mr. Strauss-Kahn is free tonight?

SUSAN CANDIOTTI, CNN NATIONAL CORRESPONDENT: Not quite yet. It means, John, that he'll be spending one more night at Rikers jail, one more night in a cell, one more night eating jail food, one more night on a protective suicide watch with the guard looking in on him every 15 minutes. But I strongly suspect he probably doesn't mind because he knows he's going to make bail and will be getting out soon, probably tomorrow.

All this time in the meantime, a security company has been hired by him and his wife to outfit an apartment in Manhattan that is just been leased by his wife, journalist Anne Sinclair, and is being outfitted with cameras that will be keeping watch 24/7. And they are paying a hefty price for those contracts and they have to pay for it. It's been estimated around $200,000 a month.

KING: That's a pricey deal to get bail.

As you mentioned, the wife -- Susan, you were in the courtroom today and we heard from the prosecutors. What was the reaction from Mr. Strauss-Kahn's family?

CANDIOTTI: You know, it's interesting. I was struck that they were very composed. I saw no reaction on the face of his wife and his daughter. They were sitting in the front row and had their eyes focused -- excuse me -- they were clutching each other's hands. When he walked into the courtroom for first time, we saw Mr. Strauss-Kahn break out into a smile for the very first time and they smiled back. At one point, he even blew them a kiss. All the while, five armed court officers were standing behind him, keeping watch on things.

And in the end, the judge looked at him sternly after granting him that bail and said to him, "Sir, you better be here."

KING: Susan Candiotti, live for us outside the courthouse.

We'll keep on track of this courthouse and we'll continue our conversation now with CNN legal analyst -- our senior legal analyst, Jeffrey Toobin. He is in New York.

And, Jeff, you just heard the prosecutors say they have a very strong case. You heard Susan describe the extraordinary means, the cameras and the monitoring that Mr. Strauss-Kahn is going to have to go through. I want you to listen here as well to one of his defense attorneys trying to make the case that this man is not a flight risk.

(BEGIN VIDEO CLIP)

WILLIAM TAYLOR, DEFENSE ATTORNEY FOR STRAUSS-KAHN: We also know that immediately after the incident, alleged incident, he enjoyed a leisurely lunch with a member of his family at a restaurant in midtown and that he got in a taxicab at 2:15, more or less, to make a 4:30 flight to JFK.

(END VIDEO CLIP)

KING: A bit of a travel log -- why, if it at all, is that important as to whether or not he gets bail?

JEFFREY TOOBIN, CNN SENIOR LEGAL ANALYST: Well, the argument that Taylor was making and presumably will make at trial is that he was not harried, he was not frantic to get out of town. If any incident took place, presumably -- the argument goes -- he would have just fled immediately to the airport. The defense has now started to spell out the argument, look, he went out to lunch with his daughter, he took a flight had been -- where the ticket had been purchased a week in advance. He was not acting in the way that you would suspect someone who had just committed a terrible crime would act.

I mean, it is an argument. It's not a bad argument. But it is hardly going to be the thing that decides the case.

KING: Jeff, stay with us.

Also joining us as part of the conversation is Thierry Arnaud. He's a senior political correspondent for the French network BFM TV. He's outside the courthouse in Manhattan.

And, Thierry, the idea that $1 million bail, all the cameras and the like, the monitoring, how is that being viewed in France? This is one of your country's most prominent politicians, an international financier, what many thought might be a candidate for president next year. Do they view that as business as usual or are there some questions about the American justice system?

THIERRY ARNAUD, BFM TV: That would be the exact opposite of the business as usual, John. It's a very different judicial system. And what has been happening over the past few days, we discussed it you and I over the past few days as well -- it has been very much of a shock in France because there's no such thing as perp walk in France. There's no such thing as cameras being allowed in a courtroom.

So, the shock is tremendous. But you may very well argue that from a French perspective and specifically from a French political perspective, the most important thing that happened today was not the fact that he was released from bail, but that was the fact that he was indicted, because what that means is that he's on his way to a trial. It's a process that's going to be very harsh, very costly.

But it is also process that in very practical terms means he cannot run for president anymore. That's the end of that particular road for him today. He has yet to announce officially that he's not going to run, but in practical terms, he just cannot do it anymore.

KING: You say just cannot do it. Do you view this and your colleagues in France view this as a temporary pause? Or is this the end, period, of his political career?

ARNAUD: It's going to be very hard for him to recover at this point in time. You know, he's 62. Maybe he could try and put himself in position to run again in five years' time. That would take him to 2017. It will be almost 70 at that point in time.

So, I don't think he has any presidential hope left. He might become a wise man of French politics, so to speak, to the extent that he can recover from this.

But, you know, up until what happened on Saturday, he had a tremendous amount of respect in France, irrespective of what happened or may have happened in that hotel room on Saturday. He is and was a very gifted, a very clever French politician. And again, he was well on his way to being in a position to defeat President Sarkozy.

And again, no matter what happened on Saturday, there's a lot of sadness, a lot of heavy hearts today and past few days at what might have been.

KING: At the political fallout there, Jeff Toobin, let's talk about the potential criminal sequences -- seven charges here and let's lay them out. Two counts of criminal sexual assault, two counts of sexual abuse, one count each of attempt to commit rape, unlawful imprisonment, and forcible touching. These are very, very serious charges.

TOOBIN: You know, I'm listening to my friend Thierry talked about running for president. This guy has to worry about going to prison for 10 years. That's what happens with people in our system who are convicted of this kind of sexual assault.

You know, it's sort of a weird thing to say. But from a legal perspective, this was actually a very good day for Dominique Strauss- Kahn because he easily could have been denied bail. There are definitely judges in New York Supreme Court who would have denied him bail. So, the fact that he will wait two months, three months, four months, for this trial in an apartment in Manhattan, rather than in a cell on Rikers Island, that is an incredible piece of good news. His defense attorneys are celebrating tonight, even though he was indicted.

KING: And, Thierry, let's make the distinction. You talk about some people in France taken offense at the perp walk, taken offense with some of the -- what they would view as the peculiarities of the American justice system. Is there, though, coverage that focuses on the gravity of these charges?

ARNAUD: Nobody is denying the gravity of the potential charges. And, you know, if he is proven to be guilty, there will not be a lot of pity for him. People will think that it is his punishment, there's no doubt about that.

But -- I mean, the shock was not about whether, you know, somebody who attempts rape deserves a very harsh punishment. It was about seeing the pictures ahead of, vis-a-vis, proven guilty. So, that's a completely different thing, if you see what I mean.

But, again, the shock was very deep. It doesn't mean at all that people are not aware that the charges are very serious. And again, that's also one of reasons why I think it's not going to be able for him to recover.

And one of the points I was trying to focus my reporting on today is trying to make people understand back in France, how harsh and difficult the next few weeks and months are going to be for him -- sitting in that apartment, also undergoing immense scrutiny. It's quite clear the prosecution is going to drive not only to prove what happened in this hotel room on Saturday is terrible, but also that it corresponds to a pattern that they are also other incidents in his past life that have not been good at all with respect to his behavior.

So, again, the next few weeks and month are going to be extremely harsh for him, even though there's a bit of good news today.

KING: Thierry Arnaud, Jeffrey Toobin, we appreciate your help on this dramatic story. We'll stay on top of it. And ahead here, rising fears as flood waters up the Mississippi turn deadly. Up next: the Mississippi governor, Haley Barbour, tells us why he fears more lives could be in danger because some residents refuse to evacuate.

(COMMERCIAL BREAK)

KING: Welcome back.

Here's the latest news you need to know:

Authorities want a DNA sample from the Unabomber, Ted Kaczynski, in connection with the unsolved 1982 Tylenol poisoning case in which seven people died after taking capsules laced with potassium cyanide. Kaczynski is serving life in prison for mailing package bombs.

Mississippi authorities confirmed the state's first death from flooding, a 69-year-old man. Governor Haley Barbour's lake home is flooded, but he tells us his biggest worry is people won't leave -- who won't leave -- despite widespread flooding.

(BEGIN VIDEO CLIP)

GOV. HALEY BARBOUR (R), MISSISSIPPI: What scares me is that a very small handful of people who might not have evacuated will be at risk in the middle of the night and we'll have to send some highway patrolmen or national guardsmen out to risk their lives.

Donald Trump is not in Iowa tonight, but he was supposed to be, and that makes the Iowa Republican chairman mad. He canceled plans to appear at a fundraiser tonight. The state Republican chairman saying, "In Iowa, your word is your bond. We're disappointed Mr. Trump has chosen not to honor his commitment to Iowa Republicans."

Former Utah governor, U.S. ambassador to China, Jon Huntsman, well, he began a five-day visit to New Hampshire today.

We'll be in New Hampshire tomorrow. And that's the first primary state and the campaign trail up there just beginning to heat up.

A bit earlier today, on the subject of 2012 politics, I spent a few minutes talking politics with the Republican Governor Haley Barbour of Mississippi.

(BEGIN VIDEOTAPE)

KING: You decided not to run for the Republican nomination for president. In recent days, you have seemed to be a cheerleader for your friend, Mitch Daniels, now the governor of Indiana, to get into the race. Do you believe he will run?

BARBOUR: I really don't know, John. You are going to have to ask him. I know myself, it's a very difficult decision. It's a very personal decision, a family decision, and a political decision.

Mitt is a smart guy. I think he would make a great president. I told him when I was thinking about running that even if I ran, I thought he ought to run. That it's good for the field to have as many good candidates. He would be one. But there are other good candidates as well, and I hope we see more.

KING: Would you endorse him if he runs?

BARBOUR: Well, you know, I never have endorsed anybody that wasn't a candidate. So, I'm going to keep my record at that.

(LAUGHTER)

KING: But you could nudge him in by saying, get in, I'll help you out and call my fundraising guys, we'll work for you.

BARBOUR: Well, he would be a very good president. He is very capable. But as I say, there are a bunch of good people that are friends of mine in this field.

KING: I suspect he already knows.

One friend of yours in this field who said what I'm going to call a very, very, very, very tough week is Newt Gingrich, the former House speaker. What do you make of the fact -- or was this perhaps predictable because the knock on Newt has always been that on occasion, that his tongue gets out ahead of his brain.

BARBOUR: Well, look, I've said stuff in my career that I wish I could take back, but when you're running for president, you can't take anything back. That's just the way it is.

Newt is very bright. He has a tremendous amount to offer. He is a friend of mine. I was chairman of the party when he was speaker of the House.

But there's not anybody in politics who hasn't said something that they regretted saying, but there are people in politics that the press treats more favorably than others.

KING: Well, are you --

BARBOUR: He is not one of those.

KING: Are you saying this is a press issue in the sense that, Governor, within a day, he gave a mixed message on Medicare, the Paul Ryan plan --, which is a centerpiece of the House Republican proposal. He called it radical. And he said things that seem to say, on the one hand, that an individual mandate in health care wasn't the worst thing in the world, and then he had to come out and say, oh, no, no, I'm not for individual mandate. That's not a press problem, is it?

BARBOUR: Well, what the press chooses to cover and how they cover it is for some candidates better, and for other candidates, they get put under the filter and get the spotlight put on them as hard as they can. Newt has always suffered from that.

You know, John, when I was chairman and Newt was speaker of the House, or even when he was in the minority leadership, if you heard Newt make a 47-minute speech, even moderate and liberal people thought, man, that guy is thoughtful and smart. But the sound bites that managed to get on TV made people think what a jerk.

So, you know, we've all said stuff that we'd like to take back. Just some people, it gets run more, and it gets emphasized more. And I'm not just talking about the liberal media elite in this case. I mean, there are a lot of conservatives who are just beating Newt over the head. So, don't take it personal, John.

KING: I don't take it personally, my friend.

I'm out my way up to New Hampshire to see Governor Huntsman who's making his debut up there, the former governor of Utah. There are some in the conservative movement who say this guy is a moderate. He was an ambassador for Barack Obama. He can't be our nominee.

Governor Huntsman -- is he a mainstream Republican in your view, or is he unacceptable?

BARBOUR: Well, Jon Huntsman and I served together. And while we don't agree on some issues, there's -- you know, it's no question that he is a conservative. He is way to the right of Barack Obama for goodness sake.

But, yes, I consider Jon a conservative. We have some -- as I say, we have some issues that I think are important that we have different views on, but he was in the Reagan administration, elected governor of a very conservative state, elected and re-elected, by the way.

So, if you ask me: is Jon Huntsman qualified to be the Republican nominee for the president of the United States, my answer is: of course, he is.

KING: I'm going to ask you, lastly. You're the Republican governor of Mississippi. You're a former Republican National Committee chairman at a time when the party had great success. Answer the Republicans out there and there are many of them -- you know this, Governor Barbour -- who are looking at this field and saying, ah, it's kind of weak.

BARBOUR: Well, the same thing that Democrats were saying in 1991 when George H.W. Bush, job approval was over the top of the moon, and nobody very strong seemed to be wanting to run on the Democratic side, and the same things were said about the Democratic field, and then, in a year and a half, we had President Bill Clinton. So, a lot of times, until you really get to know people a lot better, and many of these candidates are not very well-known, you don't see their strengths. You don't see their ability.

I think by -- when it counts next spring and summer, we will have a candidate that stacks up very well with Barack Obama and we'll have a very united Republican Party. Nobody can unite our party like Barack Obama.

KING: Always optimistic. Governor of Mississippi, Haley Barbour -- Governor, appreciate your thoughts on 2012 and best of luck in the coming days with the flood issues.

BARBOUR: Thanks, John.

(END VIDEOTAPE)

KING: We'll be right back.

(COMMERCIAL BREAK)

KING: We'll broadcast live from New Hampshire tomorrow night. Hope to see you then.